Is American Express' Post-Earnings Selloff Justified?

American Express Company AXP stock was down more than 10 percent in early Friday trading after the company reported Q4 EPS that beat consensus expectations, but revenue that fell well short of what the market was looking for. Does the market have this one wrong, or does American Express deserve the punishment? Here’s what several top firms have to say.

Stifel

Analyst Christopher Brendler believes American Express’ weak quarter “confirms our long-standing concerns about its ability to compete in today’s intensely competitive card market.”

The firm maintained its Hold rating.

Pacific Crest

Analyst Josh Beck sees “limited upside to AXP” and believes that the potential for a return to double-digit EPS growth is contingent on yet-unclear growth initiatives.

The firm maintained a Sector Weight rating.

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Barclays

Analyst Jeremy Campbell is “still seeing more risk than upside to estimates, even with new guidance.”

The firm maintained an Equal Weight rating.

Credit Suisse

Analyst Moshe Orenbuch is even more bearish, explaining that “the biggest risk to Amex’s earnings is that higher rewards and marketing costs will persist.”

The firm maintained its Underperform rating and lowered its price target from $71 to $66.

Keefe, Bruyette & Woods

Analyst Sanjay Sakhrani explains that “it is difficult for us to be constructive given the extended timeline for a return to the company’s 12-15% EPS growth targets and the need for evidence of traction and execution on the substantial investments being made.”

The firm downgraded the stock from Outperform to Market Perform and reduced it price target from $95 to $67.

Disclosure: the author holds no position in the stocks mentioned.